While most ETFs are busy tracking the S&P 500’s (and other indexes’) every step, Emerald Advisers is taking a different approach — flouting the rulebook.
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The company, in partnership with F/m Investments, introduced the F/m Emerald Special Situations ETF (NASDAQ:SPIT), a benchmark-insensitive fund targeting those companies trapped in moments of transformation — the sort that gets Wall Street nervous, but tends to get portfolios exciting.
SPIT is for those who are willing to pursue the idiosyncratic, like leadership overhauls, business turns, regulatory throws, and M&A mayhem.
David Volpe, president and portfolio manager at Emerald Advisers, said this ETF is designed for those investors who want differentiated opportunities that don’t get caught up in crowded strategies and mega-cap concentration.
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Beyond Benchmarks
Where the majority of ETFs tread well-worn ground, SPIT strays onto the trails. Managers of the fund are not restricted by sector or geography, leaving them free to pursue companies where the market is temporarily lost.
Stephen Amsterdam, portfolio manager and senior research analyst at Emerald Advisers, compared the ETF to a gas pedal within a portfolio — one that gives investors true diversification beyond what they already own.
That “gas pedal” analogy might be appropriate. SPIT’s approach bets on Emerald’s 30-year history of pinpointing under-researched growth narratives, founded on a consistent rhythm of 2,000 company interactions annually.
A Well-Timed Debut During Passive Exhaustion
The timing is apt. As passive ETFs have seen record inflows and market concentration risk at multi-decade highs, active managers are keen to remind investors that diversification still means doing something different.
SPIT is the second partnership between the two companies following last year’s F/m Emerald Life Sciences Innovation ETF (NASDAQ:LFSC).
In a world where most ETFs mimic the herd, SPIT appears happy to head in the opposite direction.
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